Cheerios maker General Mills profit forecast disappoints as costs rise

[June 29, 2022]  (Reuters) - General Mills Inc on Wednesday forecast earnings below estimates for the year, as the Cheerios cereal maker wrestles with higher costs and inflation-hit Americans opt for cheaper brands.

Packages of Cheerios, a brand owned by General Mills, are seen in a store in Manhattan, New York, U.S., November 12, 2021. REUTERS/Andrew Kelly/File Photo

U.S. packaged food makers have jacked up product prices in recent months to counter rising costs of ingredients, labor and transport, but analysts have said further hikes would be hard to implement as consumers turn frugal.

"The company anticipates double-digit inflation on its cost of goods sold in fiscal 2023," General Mills said in a statement.

The Cheerios maker forecast fiscal 2023 adjusted per-share profit growth between flat and a 3% rise. Analysts polled by Refinitiv, on average, were expecting it to increase 3.5%.

Net sales rose to $4.89 billion for the fourth quarter from $4.52 billion a year earlier, compared with estimates of $4.81 billion.

(Reporting by Praveen Paramasivam in Bengaluru; Editing by Devika Syamnath)

[© 2022 Thomson Reuters. All rights reserved.]
This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.